What did the Tribunal hold?

The Tribunal restored the matter back to the Assessing Officer for a fresh assessment, citing the principle of natural justice. The assessee was directed to substantiate their stand, failing which the AO could proceed with the assessment based on available material.

The assessee's assessment was completed on a best judgment basis due to a failure to provide full details during appellate proceedings. The Assessing Officer added Rs. 69.41 Lacs, representing cash deposited in a savings bank account, to the assessment.

What were the issues?

Whether the assessment framed on a best judgment basis is sustainable when the assessee failed to provide complete details, and whether the principle of natural justice warrants a remand for further substantiation.

S Saravanan, Trichy vs ITO | ITAT Chennai 2021

Income Tax Appellate Tribunal, “C” BENCH, CHENNAI

Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri S. Sridhar (Advocate) – Ld. AR, Shri G. Johnson (Addl. CIT) –Ld. DR

For Respondent: Shri G. Johnson (Addl. CIT) –Ld. DR

Manoj Kumar Aggarwal (Accountant Member)

Aforesaid appeal by assessee for Assessment Year (AY) 2011-12 arises out of the order of learned Commissioner of Income Tax (Appeals)-1, Trichy [CIT(A)] dated 18-12-2018 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s.144 r.w.s. 143(3) of the Act on 25-03-2014. 2. The Ld. AR, at the outset, submitted that the assessment has been framed on best judgment basis since the assessee could not submit full details during appellate proceedings. In the said background, citing principle of natural justice, Ld. AR pleaded to restore the matter back to the file of Ld. AO. The Ld. DR, on the other hand, submitted that the assessee failed to substantiate the cash deposit in the bank account. Having heard rival submissions, our adjudication would be as given in succeeding paragraphs.

The material on record would show that an assessment was framed against the assessee on 25-03-2014. Since the assessee failed to make effective representation, the assessment was completed on best judgment basis after adding on amount of Rs.69.41 Lacs, being cash deposited by the assessee in the savings bank account. The position materially remained the same during appellate proceedings which led to confirmation of stand of Ld. AO. Aggrieved, the assessee is in further appeal before us.

Though we concur with the submissions of Ld. DR that the assessee has remained negligent to attend the proceedings before lower authorities, however, keeping in view the principle of natural justice, we restore the matter of assessment back to the file of Ld. AO to frame fresh assessment with a direction to the assessee to substantiate his stand failing which Ld. AO shall be at liberty to proceed with the assessment on the basis of material on record.

The appeal stand allowed for statistical purposes. Order pronounced on 20th December, 2021. (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) उपा23 /VICE PRESIDENT लेखा सद; / ACCOUNTANT MEMBER चे)ई / Chennai; िदनांक / Dated : 20-12-2021 EDN/- आदेश क" "ितिलिप अ"ेिषत/Copy to: 1. अपीलाथ"/Appellant 2. ""यथ"/Respondent 3. आयकर आयु" (अपील)/CIT(A) 4. आयकर आयु"/CIT 5. िवभागीय "ितिनिध/DR 6. गाड" फाईल/GF

S SARAVANAN,TRICHY vs. ITO, WARD-2(1), TRICHY

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